Is Zamcelco up for privatization? Soliven asked PDF Print E-mail
Monday, 06 May 2013 14:09

Is Zamcelco up for privatization?

This is a question by Zamboanga Chamber of Commerce and Industry (ZCCIFI ) President Pedro Rufo “ Pocholo” N. Soliven after he was informed of the Zamcelco Board’s approval of Zamcelco Enhancement program  proposed by CONAL Holdings /San Ramon Power Inc. This was  confirmed by Mr. Joseph Nocos, Vice President  for business development of Conal Holdings, owner of SRPI during their presentation of the PSA for the 85 MW  last May 4  meeting with the business and industrial sector at the Grand Astoria Hotel.

The objective of the Enhancement  program as proposed by SRPI is to help Zamcelco raise its status from category “B” to category “A” in terms of management and credit worthiness. A focal target  among the program objective is to bring down the current system’s loss of almost 19%.  Per reports, the financiers  for the SRPI project are  demanding these of  SRPI  so Zamcelco can put its house in order as a guaranty that the coop is credit worthy, after SRPI signed a Power Supply Agreement for 85 MW good for 25 years.

Soliven raised  the issue on the timing of the proposed enhancement program. The proposal was submitted after the Power Supply Agreement had already been signed with the two contracting parties ( SRPI and Zamcelco) both invoking a confidentiality clause. It is a situation of putting the cart ahead of the horse. 

For a P12 billion project, due diligence is a prerequisite and demanded in assessing the credit worthiness of Zamcelco, Soliven said..

He added that in fairness to SRPI and its declared motive of helping Zamcelco put its house in order by hiring management experts to consult with Zamcelco, this remains to be seen and SRPI should be given the benefit of the doubt.

“However, the public should be wary of “Greeks bearing gifts”. Is there a Trojan horse in the background?,” Soliven asked.

Soliven said  the enhancement program being proposed by SRPI could be a prelude to a management takeover and eventual privatization of Zamcelco.

Moreover he said while privatization is not entirely a bad proposition,  we have to scrutinize the details because one  resultant impact will be the higher cost of power for all  power consumers.

“Zamcelco member-consumers must be clearly informed of the objectives  and rationale of the SRPI proposed enhancement program. In the spirit of transparency and accountability, the members consumers, the true owners of Zamcelco, must be given the correct information for their  guided decision,” said the ZCCFI president.

Soliven opined that in a given privatization scenario , with SRPI/Conal Holdings retains control of Zamcelco, you have a situation where the supplier of the power is the same entity distributing power in its franchise area.

“Given this situation, What are the check and balance mechanism to be put in place to ensure that no collusion between the distributor and supplier shall occur in this probable scenario?” he asked.

Soliven cited as clear example  what is happening with  Albay Electric Cooperative (ALECO)  which was   privatized  recently.

“There is now wild protest among its member /consumers in its  franchise area. In the  case of Zamcelco  we call on all the power stakeholders to be vigilant and be  pro active on this issue ,” Soliven urged.. — Albert Francisco III